Exploiting spectrum auctions for short-term cash could kill the long-term ‘golden goose’ before 5G networks are even deployed, say Telefonica and the GSMA
Telecoms industry leaders warned at Mobile World Congress 2019 in Barcelona this week that government greed could hold back the development of 5G, and called for a re-evaluation of the way the industry is regulated.
At the same time, Vodafone chief executive Nick Read acknowledged that telecoms companies had been slow to respond to users’ needs in the past and had provoked regulatory action on issues such as cross-Europe roaming.
Telefonica chairman and chief executive Jose María Alvarez-Pallete Lopez said without simpler regulation, “much of the expensive innovation in 5G will be lost before it is deployed”.
In an address at MWC, Lopez criticised governments for treating spectrum auctions as a “short-term cash generator”, when they should be more forward-thinking in “fostering the digital transformation that societies and economies require”.
Spectrum ‘golden goose’
Lopez called on spectrum to be awarded for longer durations, removing the need for operators to reapply for it at regular intervals.
5G auctions are set to begin within the next few weeks, ahead of the first network deployments, which are expected later in the year.
GSMA director general Mats Granryd echoed Lopez’ comments, saying spectrum auctions would defeat the promise of 5G if they loaded operators with “colossal debt”.
“Our message to governments is simple: don’t get short-term greed and kill the long-term golden goose,” he said.
Vodafone’s Read was more conciliatory, acknowledging that while the telecoms industry had played a “pivotal” role in enabling digital transformation, it has also been “a bit protectionist” in the past with technologies such as rich messaging and with cross-European roaming.
“I would say a lot of operators turn to regulators and say it’s all due to regulation but as an industry we need to start with ourselves first,” he said.
Roaming was a case in which operators failed to adderss a key “pain point” for users, Read said.
“It was a real pain point for consumers, and we didn’t address it fast enough and regulators had to step in,” he said. “Because we didn’t address these points, it provoked a regulator to moderate our behaviour.”
‘Reflect and change’
5G is an opportunity for the industry to “reflect and change”, Read said, saying operators were, for instance, planning to offset 5G rollout costs by sharing infrastructure.
He said Vodafone would share infrastructure with O2 in the UK and also had infrastructure-sharing plans in Italy.
“This is how we will improve coverage and performance and ensure the environmental impact can be lessened and returns for our industry improved,” he said, adding that “things need to change”.
Orange chief executive Stephane Richard also acknowledged the “huge operational challenge” posed by rolling out 5G, which called for “operational efficiency”.
“We have to allocate our resources smartly in a world where there are still doubts about our capacity to create revenue and return on investment in the context of increasing competition and regulatory pressure,” he said.